UK ferry operator P&O Ferries has sacked about 800 crew across its fleet after stopping all its sailings on Thursday 17 March.
It is thought that the company may have plans to use agency staff to operate its ships after P&O Ferries, owned by Dubai-based DP World, told its crew to return to port and await a “major announcement”.
Unions called the surprise move a “scandalous betrayal” and have said a standoff could develop, with crews instructed not to leave vessels, while coaches of replacement crew and security staff are already in place at Dover and Hull.
P&O’s action may be serious legal risk, one employment lawyer told Personnel Today, and could expose it to hundreds of unfair dismissal claims.
A spokesperson for P&O Ferries said it had to take a “very difficult but necessary decision” to “secure the future viability of our business, which employs an additional 2,200 people, and supports billions in trade in and out of the UK”.
The company stated: “In its current state, P&O Ferries is not a viable business. We have made a £100m loss year-on-year, which has been covered by our parent DP World. This is not sustainable. Our survival is dependent on making swift and significant changes now.”
According to the RMT union, private security officers have been sent onto one ship docked at Larne Harbour in Northern Ireland to remove staff on board. Gary Jackson, a full-time officer onboard the Pride of Hull, told the BBC that the crew docked in Hull were informed they had lost their jobs through a pre-recorded message at 11am [on 17 March] and had not received anything in writing from the company. “We’ve still not received any detail further on what they will offer. We can see from the ship two vans, one with agency staff and the other with what we believe are security staff to remove us… and that’s why the captain here lifted the gangway.”
Hull’s Labour MP, Karl Turner, said the sackings were “utterly deplorable predatory practice taking full advantage of the gap in the legislation”.
Labour’s shadow transport secretary, Louise Haigh, called on the government to act, saying: “Unscrupulous employers cannot be given free rein to sack their workforce in secure jobs and replace with agency staff. The Conservative government must not give the green light to this appalling practice, and must act to secure the livelihoods of these workers.”
P&O is a leading ferry operator on the Dover-Calais crossing, the main sea link from Britain and Europe, and also sails from Hull to Rotterdam, Liverpool to Dublin and Cairnryan in Scotland to Larne.
The RMT general secretary, Mick Lynch, said: “We have instructed our members to remain on board and are demanding our members across P&O’s UK operations are protected and that the secretary of state intervenes to save UK seafarers from the dole queue.”
The maritime union Nautilus International said the news was “a betrayal of British workers”. Its general secretary, Mark Dickinson, said: “It is nothing short of scandalous, given that this Dubai-owned company received British taxpayer’s money during the pandemic.
“There was no consultation and no notice given by P&O. Be assured, the full resources of Nautilus International stand ready to act in defence of our members. We have instructed our members to stay onboard until further notice.”
P&O Ferries said in May 2020 that it may have to make 1,100 out of its near 4,000 employees redundant because of the coronavirus pandemic. It was given £33m in emergency funding by the government to ensure freight kept sailing.
Transport secretary, Grant Shapps, told the House of Commons he was “concerned” by the news. He said: “We will be taking steps later today, including ensuring officials are having urgent discussion with P&O about the situation, particularly concerning their workers.”
P&O Ferries apologised to customers on Twitter, saying: “Regretfully, P&O Ferries services are unable to run for the next few hours. Our port teams will guide you and travel will be arranged via an alternative operator.” Cross-Channel ferry passengers and truck drivers were expected to be diverted to DFDS or Eurotunnel services. Passengers on Irish Sea crossings have been sent to Stena Line.
As P&O appear to have foregone a proper notice and consultation process, it is highly likely that such dismissal will be procedurally unfair” – Nathan Donaldson, Keystone Law
DP World bought P&O Ferries for a second time in 2019, for £322m, after selling it earlier in the decade. It is believed to have been making escalating losses, with the rising cost of diesel adding to disruption from Covid and post-Brexit paperwork in cross-Channel traffic. DP World, which is owned by Dubai’s sovereign wealth fund said it had never taken a dividend from P&O Ferries.
P&O Ferries’ actions exposed the company to significant legal risks, said Christian Grierson, employment solicitor at Sharpe Pritchard.
He said any failure to give notice to the employees would, if correct, “be a fundamental breach of an employer’s obligation to undertake consultation when 100 or more redundancies are proposed, and this must begin at least 45 days before the first dismissal takes effect. A protective award could be made of 45 days’ gross pay for each employee, reflecting the period that the employees would have been employed anyway, had P&O observed the consultation period.
“Equally, for employees with more than two years’ service they may be able to bring claim for unfair dismissal. Despite redundancy being one of the potentially fair reasons for dismissal the employees may still be able to argue that suitable alternative employment should have been considered.
“Sadly, the decisions to fire the majority of staff and adopt practices such as fire and rehire are gaining traction as companies struggle with vulnerable finances after the pandemic, especially with the travel sector being particularly hard hit and having to take radical decisions.”
Nathan Donaldson, employment solicitor at Keystone Law, said that the approach adopted by P&O was not unheard of, but it was exceptional to forego notice and consultation processes. He added it was highly likely that the dismissals would be deemed unfair as they did not follow due process – but they may still be accepted by an employment tribunal as substantively fair.
Donaldson said: “The termination and re-engagement of staff or alternative staff on less costly contractual provisions is potentially lawful under the Employment Rights Act 1996 as a Some Other Substantial Reason for Dismissal.
“However, to be fair the employer needs to show that the reason to dismiss and rehire staff is a substantial reason and that they have followed an otherwise reasonable process leading to the decision to dismiss and rehire.
“As P&O appear to have foregone a proper notice and consultation process, it is highly likely that such dismissal will be procedurally unfair though may still be accepted by an employment tribunal as substantively fair.
Donaldson pointed out that during the pandemic, some employers in desperation adopted “fire and rehire” tactics to change terms and conditions of employment, albeit with periods of appropriate notice and consultation.
This resulted in the government instructing ACAS to review fire and rehire tactics. Although this did not find the practice unlawful or recommended it’s being made unlawful, it did set out proper guidance for implementing such a process and emphasise it should be a process of last resort.